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| Author: | Jayaraman, N. Sabherwal, S. Shrikhande, M. |
| Title: | Do Country Specific Bankruptcy Codes Determine Long-term Financial Performance? The Case of Metallgesellschaft AG and Columbia Gas System |
| Journal: | Journal of international financial management & accounting
2001 : SUMMER, VOL. 12:2, p. 133-159 |
| Index terms: | FINANCIAL MANAGEMENT BANKRUPTCY FINANCIAL PERFORMANCE CASE STUDIES |
| Language: | eng |
| Abstract: | This paper examines the impact of financial distress, the bankruptcy code, and related procedures on the long- term performance of two companies engaged in similar businesses across two countries. Both the companies were driven into bankruptcy as a result of unanticipated changes in energy prices. Though the resolution of bankruptcy of the US firm took a longer time, the post- reorganization performance of the firm has been excellent. In contrast, the post-reorganization performance of the German firm, which emerged out of bankruptcy in 2 weeks, has been poor. These results are consistent with the view that one of the important determinants of post-bankruptcy performance of a firm is more likely to be the underlying economic fundamentals. |
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